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A week after it became clear that the Australian newspaper publishing industry was about to undergo its biggest restructuring in history, Greg Hywood emphasises that people need to get used to change.

“I think everyone would like the world to be the way it was. It’s not,” says the Fairfax Media chief executive.

“Do they want the management team to wallow around, be confused, make half-hearted decisions, and then when they do, not tell them exactly what’s happening? Or do they want them to say this is what’s happening, this is the way it is?”

Hywood chose the latter, especially given the continuous disclosure requirements imposed on a publicly listed company.

“We don’t have the option of honey-coating but frankly you don’t want the option,” he asserts.

At the beginning of last week, Hywood faced the biggest sales job of his 18-month tenure in the CEO role when he faced about 200 senior staff in Sydney to announce that Fairfax, publisher of The Australian Financial Review, was to cut 1900 jobs – almost one-fifth of total staff – and $235 million in costs over the next three years.

Other initiatives included mothballing the printing presses at Chullora in Sydney and Tullamarine in Melbourne in two years, switching the printed formats of flagship metropolitan newspapers The Sydney Morning Herald and The Age in Melbourne from broadsheet to compact in March and introducing digital subscriptions for these two mastheads early next year.

A major part of his announcement was that Fairfax was prepared to go fully digital for its metro mastheads if the advertising market worsened materially.

This prompted some to wonder if Fairfax was a little too eager to walk away from the printed versions of its metro mastheads.

“By talking up digital doesn’t mean we’re talking down print,” says Hywood. “We’ve got optionality.” He adds that this should be considered a valuable asset in itself as new digital technologies destroy the old business models of print media.

“We’re moving out of over-capacity [printing] sites which are too large, we’re moving to compact, we’re improving the profitability of our print business, and we are so good at our digital business we have scoped out down the track what we believe is, at a higher level, a profitable digital-only business,” he says.

“That doesn’t mean we’re on some sort of mad rush to get there, because there’s $500 million worth of print advertising and we’re not going to walk away from that.”

Hywood is bullish on Fairfax’s digital prospects over rival publisher News Limited because “our print and digital audience is larger than theirs”.

“We have the number one and number three news media sites in this country,” he says, adding Fairfax also has 7 million unduplicated users across its masthead websites.

Two days after Fairfax unveiled its plans, News announced its newspaper restructuring intentions – but without the detail.

News chief executive Kim Williams addressed his staff via a long video. Williams spruiked News’ $2 billion takeover bid for pay TV investment company Consolidated Media Holdings, and its $30 million purchase of Australian Independent Business Media, which publishes websites Business Spectator and Eureka Report.

Williams mentioned towards the end of the video that “regrettably” some staff would be redundant in the next 18 to 24 months but gave no specific figures. Williams later told ABC Radio that “I don’t have a number on redundancies”.

Yesterday, however, the Media, Entertainment and Arts Alliance, criticised News for sacking up to 70 digital staff, saying the company was off to “a poor start to its restructuring process”.

There is speculation News may cut more than 1000 jobs in total.

“News Limited is not publicly listed. Fairfax Media is publicly listed,” says Hywood. “So we have a broader constituency. Our investors needed clarity on a whole range of issues.”

Chief among them is explaining how Fairfax is moving from a legacy high fixed-cost base – almost three-quarters of total costs are fixed – to a lower-cost base “more relevant to current realities”.

For the rest of last week, Hywood hit the pavement with chairman Roger Corbett and chief financial officer Brian Cassell to sell the restructuring plans to institutional investors. He says investors appreciated Fairfax’s transparency and decisive actions.

“They wanted to look at our trading conditions, revenue outlook, issues around implementation, issues around printing capacities,” he says. “They didn’t have issues around the need to do it, nor the fundamental direction we were taking.”

Although the trio sought meetings with all major shareholders, one meeting that did not happen was with Fairfax’s largest shareholder, Perth-based mining magnate Gina Rinehart, who owns 18.7 per cent.

Rinehart’s stalemate with the board over board representation and corporate governance issues has created uncertainty that has weighed heavily on the stock.

Although the share price jumped 7 per cent on the day of the announcement to 65¢, it has since dropped to 55¢ yesterday.

When asked if institutional shareholders were agitated before last week, Hywood replies: “If you have been a shareholder in the company and you have seen the share price go down, you’re always pretty keen to see some activity.

“We believe there’s huge value inside the company.”

He points to making the metro division, which generates about one-fifth of earnings, more profitable; the strength of the local regional publishing division, which has 70 to 80 per cent readership penetration; a diverse digital business, and new management stabilising radio revenue declines.

For those decrying the death of journalism from the changes, Hywood reverts to his change philosophy. “People are confusing changes in the media with changes in journalism,” he says.

“Journalism will continue to thrive while people want information, commentary and analysis. Media always changes.”